MONEY CLINIC: How does the economic fallout from Covid-19 affect my pension?

A Fin24 reader noticing a negative investment return on his pension fund seeks the advice of an expert on how Covid-19 and the state of the economy affects his investment.

He writes:

Please help. In these trying times, does the economy, Covid-19 and the fact that we have been downgraded to "junk status" by Moody’s affect my pension? I have noticed a negative investment return on my pension.

Andre Tuck, Senior Investment Consultant at 10X Investments, responds:

As human beings (and as investors), we are currently experiencing a significant global event. Uncertainty and volatility in the world financial markets has led to anxiety about what to think and how to react to all of this.    

There has been a proper market correction, most of which happened in the month of March. Many people’s investments will have reflected this correction, as you note with yours. It is difficult to predict the full extent of the repercussions of the current continuing crisis, but we have been fortunate (and surprised) that world markets and our JSE All Share have rebounded over the past five weeks and recovered most of the losses.   

We know historically that equities deliver the highest return of the primary asset classes. If you are investing for longer than five years, you will be able to ride out the short-term market fluctuations. 

At 10X, we always say that we don’t know where the markets are headed in the short term but following sound long-term investing principles will give you superior long-term results. 

Foremost in those principles are the importance of diversification and keeping your costs down. You should diversify your investments across local and international equities, properties, government bonds and cash, and keep your costs as low as possible, preferably under 1% pa. 

If you have the fundamentals right, your investment will recover and go on to do well in the long term. Sticking to your strategy is important during tough times because a change in strategy, i.e. selling when markets are down, just locks in your losses.

Compiled by Allison Jeftha. 

  • Have a money problem that needs solving? Fin24 can help! Send your question to or find the Money Clinic box on the right of our homepage. 

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 1771 votes
I am taking a hit, but should be able to recover in the next year
23% - 2330 votes
My finances have been devastated
35% - 3481 votes
It's still too early to know what the full effect will be
25% - 2498 votes